eucatastrophe n. eucatastrophic [ < Gr. eu, "good" and catastrophe Coined by JRR Tolkien.] 1. (in a narrative) The event that shifts the balance in favor of the protagonist when all seems lost. 2. A happy ending.

July 2012

07/13/2012

A Week on the Concord and Merrimack River by Henry David Thoreau REVIEW

In two days, I will be sitting on the banks of the Concord River. Shoulder willing, maybe I will be kayaking on it. It seemed appropriate then to take the opportunity today to read Henry David Thoreau’s account of his two week boat trip on the same (Lets not quibble about his titling his book A WEEK on the Concord and Merrimack Rivers).

But how does one distill 200 pages of Thoreau into a reasonable blog post? Surely it is almost as Herculean a task as Thoreau’s original task of condensing two weeks of his own thoughts to two hundred pages.

Thoreau was incapable of thinking about anything without numerous and profound thought associations. Perhaps I will just let him speak. Here are some of the questions he seems to be addressing that interested me.

Question One:Why would someone set out to paddle rivers for two weeks when they could be, I don’t know, making money?

Answer: To give themselves time to think about life in such a way that it becomes worth writing about.

“You shall see rude and sturdy, experienced and wise men, keeping their castles, or teaming up their summer's wood, or chopping alone in the woods, men fuller of talk and rare adventure in the sun and wind and rain, than a chestnut is of meat; who were out not only in '75 and 1812, but have been out every day of their lives; greater men than Homer, or Chaucer, or Shakespeare, only they never got time to say so; they never took to the way of writing. Look at their fields, and imagine what they might write, if ever they should put pen to paper. Or what have they not written on the face of the earth already, clearing, and burning, and scratching, and harrowing, and ploughing, and subsoiling, in and in, and out and out, and over and over, again and again, erasing what they had already written for want of parchment.”

Answer: To expose oneself to the joy of discovery. And it is possible to feel that - even if you just happen to go to see something you have seen before in some different way or by some different route:

“Rivers must have been the guides which conducted the footsteps of the first travelers. They are the constant lure, when they flow by our doors, to distant enterprise and adventure, and, by a natural impulse, the dwellers on their banks will at length accompany their currents to the lowlands of the globe, or explore at their invitation the interior of continents.”

“I had often stood on the banks of the Concord, watching the lapse of the current, an emblem of all progress, following the same law with the system, with time, and all that is made; the weeds at the bottom gently bending down the stream, shaken by the watery wind, still planted where their seeds had sunk, but erelong to die and go down likewise; the shining pebbles, not yet anxious to better their condition, the chips and weeds, and occasional logs and stems of trees that floated past, fulfilling their fate, were objects of singular interest to me, and at last I resolved to launch myself on its bosom and float whither it would bear me.”

“Gradually the village murmur subsided, and we seemed to be embarked on the placid current of our dreams, floating from past to future as silently as one awakes to fresh morning or evening thoughts.”

“It is an important epoch when a man who has always lived on the east side of a mountain, and seen it in the west, travels round and sees it in the east. Yet the universe is a sphere whose centre is wherever there is intelligence. The sun is not so central as a man.”

“The poor rich man! all he has is what he has bought. What I see is mine. I am a large owner in the Merrimack intervals.”

“He is the rich man, and enjoys the fruits of riches, who summer and winter forever can find delight in his own thoughts.”

Question Two: Is nature put to its best use when it is put to use for utilitarian and material ends? Or is its primary benefit to be had in its beauty?

Answer: Undoubtedly, we are better served with beauty because while material benefit provides temporary gain, the memory of beauty feeds us indefinitely.

“I for one am with thee [fish], and who knows what may avail a crow-bar against that Billerica dam?”

“It required some rudeness to disturb with our boat the mirror-like surface of the water, in which every twig and blade of grass was so faithfully reflected; too faithfully indeed for art to imitate, for only Nature may exaggerate herself. The shallowest still water is unfathomable.”

“He buys the Indian's moccasins and baskets, then buys his hunting-grounds, and at length forgets where he is buried and ploughs up his bones. And here town records, old, tattered, time-worn, weather-stained chronicles, contain the Indian sachem's mark perchance, an arrow or a beaver, and the few fatal words by which he deeded his hunting-grounds away. He comes with a list of ancient Saxon, Norman, and Celtic names, and strews them up and down this river, -- Framingham, Sudbury, Bedford, Carlisle, Billerica, Chelmsford, -- and this is New Angle-land, and these are the New West Saxons whom the Red Men call, not Angle-ish or English, but Yengeese, and so at last they are known for Yankees.”

“There is in my nature, methinks, a singular yearning toward all wildness. I know of no redeeming qualities in myself but a sincere love for some things, and when I am reproved I fall back on to this ground. What have I to do with ploughs?”

“It is true, there are the innocent pleasures of country life, and it is sometimes pleasant to make the earth yield her increase, and gather the fruits in their season, but the heroic spirit will not fail to dream of remoter retirements and more rugged paths.”

“If we could listen but for an instant to the chant of the Indian muse, we should understand why he will not exchange his savageness for civilization. Nations are not whimsical. Steel and blankets are strong temptations; but the Indian does well to continue Indian.”

Question Three: If nature, mythology, or comparative religions can better provide us with the experience of connection to spiritual sublimity than one particular religion, should the later be exchanged for the former?

Answer: Thoreau would say, yes.

“To some extent, mythology is only the most ancient history and biography. So far from being false or fabulous in the common sense, it contains only enduring and essential truth, the I and you, the here and there, the now and then, being omitted.”

“I am not sure but I should betake myself in extremities to the liberal divinities of Greece, rather than to my country's God. Jehovah, though with us he has acquired new attributes, is more absolute and unapproachable, but hardly more divine, than Jove. He is not so much of a gentleman, not so gracious and catholic, he does not exert so intimate and genial an influence on nature, as many a god of the Greeks.”

“It seems to me that the god that is commonly worshipped in civilized countries is not at all divine, though he bears a divine name, but is the overwhelming authority and respectability of mankind combined. Men reverence one another, not yet God.”

“What are time and space to Christianity, eighteen hundred years, and a new world? -- that the humble life of a Jewish peasant should have force to make a New York bishop so bigoted.”

“It is necessary not to be Christian to appreciate the beauty and significance of the life of Christ.”

“Most people with whom I talk, men and women even of some originality and genius, have their scheme of the universe all cut and dried, -- very dry, I assure you, to hear, dry enough to burn, dry-rotted and powder-post, methinks, -- which they set up between you and them in the shortest intercourse; an ancient and tottering frame with all its boards blown off. They do not walk without their bed. Some, to me, seemingly very unimportant and unsubstantial things and relations, are for them everlastingly settled, -- as Father, Son, and Holy Ghost, and the like. These are like the everlasting hills to them. But in all my wanderings I never came across the least vestige of authority for these things.”

“Your scheme must be the framework of the universe; all other schemes will soon be ruins. The perfect God in his revelations of himself has never got to the length of one such proposition as you, his prophets, state. Have you learned the alphabet of heaven and can count three? Do you know the number of God's family? Can you put mysteries into words? Do you presume to fable of the ineffable? Pray, what geographer are you, that speak of heaven's topography? Whose friend are you that speak of God's personality? Do you, Miles Howard, think that he has made you his confidant? Tell me of the height of the mountains of the moon, or of the diameter of space, and I may believe you, but of the secret history of the Almighty, and I shall pronounce thee mad. Yet we have a sort of family history of our God, -- so have the Tahitians of theirs, -- and some old poet's grand imagination is imposed on us as adamantine everlasting truth, and God's own word!”

“ The New Testament is an invaluable book, though I confess to having been slightly prejudiced against it in my very early days by the church and the Sabbath school, so that it seemed, before I read it, to be the yellowest book in the catalogue. Yet I early escaped from their meshes. It was hard to get the commentaries out of one's head and taste its true flavor.”

“The reading which I love best is the scriptures of the several nations, though it happens that I am better acquainted with those of the Hindoos, the Chinese, and the Persians, than of the Hebrews, which I have come to last. Give me one of these Bibles and you have silenced me for a while. When I recover the use of my tongue, I am wont to worry my neighbors with the new sentences . .. “

[Speaking of the Bible] “I know of no book that has so few readers.”

“To Christians, no less than Greeks and Jews, it is foolishness and a stumbling-block. There are, indeed, severe things in it which no man should read aloud more than once. -- "Seek first the kingdom of heaven." -- "Lay not up for yourselves treasures on earth." -- "If thou wilt be perfect, go and sell that thou hast, and give to the poor, and thou shalt have treasure in heaven." -- "For what is a man profited, if he shall gain the whole world, and lose his own soul? or what shall a man give in exchange for his soul?" -- Think of this, Yankees! -- "Verily, I say unto you, if ye have faith as a grain of mustard seed, ye shall say unto this mountain, Remove hence to yonder place; and it shall remove; and nothing shall be impossible unto you." -- Think of repeating these things to a New England audience! thirdly, fourthly, fifteenthly, till there are three barrels of sermons! Who, without cant, can read them aloud? Who, without cant, can hear them, and not go out of the meeting-house? They never were read, they never were heard. Let but one of these sentences be rightly read, from any pulpit in the land, and there would not be left one stone of that meeting-house upon another.”

“If I should ask the minister of Middlesex to let me speak in his pulpit on a Sunday, he would object, because I do not pray as he does, or because I am not ordained. What under the sun are these things?

“Really, there is no infidelity, now-a-days, so great as that which prays, and keeps the Sabbath, and rebuilds the churches.”

“Our mother's faith has not grown with her experience. Her experience has been too much for her. The lesson of life was too hard for her to learn.”

Question Four: How does one evaluate the value of any particular book?

Answer: By requiring that our books give us insights clearly expressed by people who came to them from clear experience.

“I do not mean to imply that I am any better than my neighbors; for, alas! I know that I am only as good, though I love better books than they.”

“It would be worth the while to select our reading, for books are the society we keep; to read only the serenely true; never statistics, nor fiction, nor news, nor reports, nor periodicals, but only great poems, and when they failed, read them again, or perchance write more.”

“Books, not which afford us a cowering enjoyment, but in which each thought is of unusual daring; such as an idle man cannot read, and a timid one would not be entertained by, which even make us dangerous to existing institutions, -- such call I good books.”

“Books of natural history aim commonly to be hasty schedules, or inventories of God's property, by some clerk. They do not in the least teach the divine view of nature . . .”

“A book should contain pure discoveries, glimpses of terra firma, though by shipwrecked mariners, and not the art of navigation by those who have never been out of sight of land. They must not yield wheat and potatoes, but must themselves be the unconstrained and natural harvest of their author's lives.”

“We do not learn much from learned books, but from true, sincere, human books, from frank and honest biographies.”

“A perfectly healthy sentence, it is true, is extremely rare.”

“Men have a respect for scholarship and learning greatly out of proportion to the use they commonly serve.”

Question Five: What is the life worth living?

Answer: The life of personal discovery

“Most men have no inclination, no rapids, no cascades, but marshes, and alligators, and miasma instead.”

“What, after all, does the practicalness of life amount to? The things immediate to be done are very trivial. I could postpone them all to hear this locust sing. The most glorious fact in my experience is not anything that I have done or may hope to do, but a transient thought, or vision, or dream, which I have had. I would give all the wealth of the world, and all the deeds of all the heroes, for one true vision. But how can I communicate with the gods who am a pencil-maker on the earth, and not be insane?”

Give me a sentence which no intelligence can understand. There must be a kind of life and palpitation to it, and under its words a kind of blood must circulate forever.

Question Six: What keeps people from living such lives?

Answer: Fear? Peer Pressure? Lack of imagination?

“So far as my experience goes, travelers generally exaggerate the difficulties of the way. Like most evil, the difficulty is imaginary; for what's the hurry? If a person lost would conclude that after all he is not lost, he is not beside himself, but standing in his own old shoes on the very spot where he is, and that for the time being he will live there; but the places that have known him, they are lost, -- how much anxiety and danger would vanish. I am not alone if I stand by myself. Who knows where in space this globe is rolling? Yet we will not give ourselves up for lost, let it go where it will.”

“The most stupendous scenery ceases to be sublime when it becomes distinct, or in other words limited, and the imagination is no longer encouraged to exaggerate it. The actual height and breadth of a mountain or a waterfall are always ridiculously small; they are the imagined only that content us. Nature is not made after such a fashion as we would have her. We piously exaggerate her wonders, as the scenery around our home.”

“The truth is, there is money buried everywhere, and you have only to go to work to find it.”

ON LOVE. Love walking swiftly, With hyacinthine staff, Bade me to take a run with him; And hastening through swift torrents, And woody places, and over precipices, A water-snake stung me. And my heart leaped up to My mouth, and I should have fainted; But Love fanning my brows With his soft wings, said, Surely, thou art not able to love.

Question Seven: What is the essence of a Great Life? In service? Accumulation? Or is it to be found in the legacy of personal discovery and later influence?

Answer: Thoreau would argue that it is in the pursuit one one’s own personality that one hopes to obtain anything that can be called “great”.

“Every town which we passed, if we may believe the Gazetteer, had been the residence of some great man. But though we knocked at many doors, and even made particular inquiries, we could not find that there were any now living.”

“But generally speaking, the land is now, at any rate, very barren of men, and we doubt if there are as many hundreds as we read of. It may be that we stood too near.”

Question Eight: What makes for a quality friendship and how valuable is it to the good life?

Answer: Friends are essential to us when they give us cause to live up to our ideals and these sorts of friends are few and far between.

“Of what use the friendliest dispositions even, if there are no hours given to Friendship, if it is forever postponed to unimportant duties and relations? Friendship is first, Friendship last. But it is equally impossible to forget our Friends, and to make them answer to our ideal. When they say farewell, then indeed we begin to keep them company. How often we find ourselves turning our backs on our actual Friends, that we may go and meet their ideal cousins. I would that I were worthy to be any man's Friend.”

“What is commonly honored with the name of Friendship is no very profound or powerful instinct. Men do not, after all, love their Friends greatly. I do not often see the farmers made seers and wise to the verge of insanity by their Friendship for one another. They are not often transfigured and translated by love in each other's presence. I do not observe them purified, refined, and elevated by the love of a man. If one abates a little the price of his wood, or gives a neighbor his vote at town-meeting, or a barrel of apples, or lends him his wagon frequently, it is esteemed a rare instance of Friendship. Nor do the farmers' wives lead lives consecrated to Friendship. I do not see the pair of farmer Friends of either sex prepared to stand against the world. There are only two or three couples in history. To say that a man is your Friend, means commonly no more than this, that he is not your enemy. Most contemplate only what would be the accidental and trifling advantages of Friendship, as that the Friend can assist in time of need, by his substance, or his influence, or his counsel; but he who foresees such advantages in this relation proves himself blind to its real advantage, or indeed wholly inexperienced in the relation itself. Such services are particular and menial, compared with the perpetual and all-embracing service which it is. Even the utmost good-will and harmony and practical kindness are not sufficient for Friendship, for Friends do not live in harmony merely, as some say, but in melody. We do not wish for Friends to feed and clothe our bodies, -- neighbors are kind enough for that, -- but to do the like office to our spirits. For this few are rich enough, however well disposed they may be. For the most part we stupidly confound one man with another. The dull distinguish only races or nations, or at most classes, but the wise man, individuals. To his Friend a man's peculiar character appears in every feature and in every action, and it is thus drawn out and improved by him.”

“A Friend is one who incessantly pays us the compliment of expecting from us all the virtues, and who can appreciate them in us. It takes two to speak the truth, -- one to speak, and another to hear.”

“But sometimes we are said to love another, that is, to stand in a true relation to him, so that we give the best to, and receive the best from, him. Between whom there is hearty truth, there is love; and in proportion to our truthfulness and confidence in one another, our lives are divine and miraculous, and answer to our ideal.”

“The Friend asks no return but that his Friend will religiously accept and wear and not disgrace his apotheosis of him. They cherish each other's hopes. They are kind to each other's dreams.”

“Men and women of equal culture, thrown together, are sure to be of a certain value to one another, more than men to men. There exists already a natural disinterestedness and liberality in such society, and I think that any man will more confidently carry his favorite books to read to some circle of intelligent women, than to one of his own sex. The visit of man to man is wont to be an interruption, but the sexes naturally expect one another. Yet Friendship is no respecter of sex; and perhaps it is more rare between the sexes than between two of the same sex.

“My Friend is that one whom I can associate with my choicest thought. I always assign to him a nobler employment in my absence than I ever find him engaged in; and I imagine that the hours which he devotes to me were snatched from a higher society.

“The language of Friendship is not words, but meanings. It is an intelligence above language.”

“I value and trust those who love and praise my aspiration rather than my performance. If you would not stop to look at me, but look whither I am looking, and farther, then my education could not dispense with your company.”

“As I love nature, as I love singing birds, and gleaming stubble, and flowing rivers, and morning and evening, and summer and winter, I love thee, my Friend.”

“But all that can be said of Friendship, is like botany to flowers. How can the understanding take account of its friendliness?”

Question Nine: Can a person live a good life if they do not live an imaginative life?

Answer: Imagination is the crucial ingredient to any life worth living in this world that so constantly diminishes the need for the same.

“This world is but canvas to our imaginations. I see men with infinite pains endeavoring to realize to their bodies, what I, with at least equal pains, would realize to my imagination, -- its capacities; for certainly there is a life of the mind above the wants of the body, and independent of it.”

“We can never safely exceed the actual facts in our narratives. Of pure invention, such as some suppose, there is no instance. To write a true work of fiction even, is only to take leisure and liberty to describe some things more exactly as they are.”

“A true account of the actual is the rarest poetry, for common sense always takes a hasty and superficial view. Though I am not much acquainted with the works of Goethe, I should say that it was one of his chief excellences as a writer, that he was satisfied with giving an exact description of things as they appeared to him, and their effect upon him. Most travelers have not self-respect enough to do this simply, and make objects and events stand around them as the centre, but still imagine more favorable positions and relations than the actual ones, and so we get no valuable report from them at all. In his Italian Travels Goethe jogs along at a snail's pace, but always mindful that the earth is beneath and the heavens are above him. His Italy is not merely the fatherland of lazzaroni and virtuosi, and scene of splendid ruins, but a solid turf-clad soil, daily shined on by the sun, and nightly by the moon. Even the few showers are faithfully recorded. He speaks as an unconcerned spectator, whose object is faithfully to describe what he sees, and that, for the most part, in the order in which he sees it. Even his reflections do not interfere with his descriptions.”

“ If you can speak what you will never hear, if you can write what you will never read, you have done rare things.”

“Unfortunately, many things have been omitted which should have been recorded in our journal; for though we made it a rule to set down all our experiences therein, yet such a resolution is very hard to keep, for the important experience rarely allows us to remember such obligations, and so indifferent things get recorded, while that is frequently neglected. It is not easy to write in a journal what interests us at any time, because to write it is not what interests us.”

“To the rarest genius it is the most expensive to succumb and conform to the ways of the world. Genius is the worst of lumber, if the poet would float upon the breeze of popularity.”

Question Ten: What is the relationship between living and writing.

Answer: Writing is just living done on paper.

“The true poem is not that which the public read. There is always a poem not printed on paper, coincident with the production of this, stereotyped in the poet's life. It is what he has become through his work. Not how is the idea expressed in stone, or on canvas or paper, is the question, but how far it has obtained form and expression in the life of the artist. His true work will not stand in any prince's gallery.”

“My life has been the poem I would have writ, But I could not both live and utter it.”

Question Eleven: Must we travel far to see what is beautiful?

Answer: Where is the nearest kayak to the Concord or Merrimack?

“We need pray for no higher heaven than the pure senses can furnish, a purely sensuous life. Our present senses are but the rudiments of what they are destined to become. We are comparatively deaf and dumb and blind, and without smell or taste or feeling. Every generation makes the discovery, that its divine vigor has been dissipated, and each sense and faculty misapplied and debauched. The ears were made, not for such trivial uses as men are wont to suppose, but to hear celestial sounds. The eyes were not made for such grovelling uses as they are now put to and worn out by, but to behold beauty now invisible. May we not see God? Are we to be put off and amused in this life, as it were with a mere allegory? Is not Nature, rightly read, that of which she is commonly taken to be the symbol merely?”

“It is easier to discover another such a new world as Columbus did, than to go within one fold of this which we appear to know so well; the land is lost sight of, the compass varies, and mankind mutiny; and still history accumulates like rubbish before the portals of nature. But there is only necessary a moment's sanity and sound senses, to teach us that there is a nature behind the ordinary, in which we have only some vague pre-emption right and western reserve as yet. We live on the outskirts of that region.”

Question Twelve: What is the Achilles heel of the transcendentalist addiction to beauty?

Answer: Sigh.

ON WOMEN. Nature has given horns To bulls, and hoofs to horses, Swiftness to hares, To lions yawning teeth, To fishes swimming, To birds flight, To men wisdom. For woman she had nothing beside; What then does she give? Beauty, -- Instead of all shields, Instead of all spears; And she conquers even iron And fire, who is beautiful.

Question for Comment: If a good life is to be judged as one that allows for experiences, reflection, and some semblance of an influence, have you lived a good life?

07/04/2012

I won a hundred dollar gift certificate to a book store the other day and ran out and used it in the exact same way that any of you would; I purchased a 545 page copy of the Financial Crisis Inquiry Report – the official U.S. Government report on the causes of the present financial crisis in the United States. I admit, there are portions of it that will make your eyes glaze over (perhaps portions of this blog post will have the same effect?) but on the whole it carries an interesting argument and one well worth my embedding into my classes in Ethics and in U.S. History.

To begin with, I should note that there were six Democratic appointees and four Republican appointees on the committee and as a result the report was only approved by a 6- 4 majority (surprised?). Two ten page dissents are included but generally speaking, the two sides speak only of differing emphasis. Predictably, the Democratic majority sees the problem being caused by insufficient government oversight and regulation while the Republicans see the crisis being caused by excessive government meddling and a lack of scruples primarily at the level of borrower and broker (i.e. the proletariat). Naturally, the Democrats saw this moral deficiency residing primarily at the top of the food chain not the bottom. “This crisis was the result of human action and inaction, not of mother nature or computer models gone haywire,” the majority concludes, “The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public,” they continue, echoing the words of Franklin Delano Roosevelt who castigated the Wall street bankers of his day in his inaugural address.

“Primarily this [Economic Depression] is because the rulers of the exchange of mankind's goods have failed,” said Roosevelt on that occasion, “Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.” “Theirs was a big mess,” say the majority in the Economic Crisis Report,

“not a stumble. While the business cycle cannot be repealed, a crisis of this magnitude need not have occurred. To paraphrase Shakespeare, “the fault lies not in the stars, but in us.”

But what they mean when they say “us” is primarily focused at the “captains of industry” in the financial sector and in The Fed.

“Despite the expressed view of many on Wall Street and in Washington that the crisis could not have been foreseen or avoided, there were warning signs. The tragedy was that they were ignored or discounted. There was an explosion in risky subprime lending and securitization, an unsustainable rise in housing prices, widespread reports of egregious and predatory lending practices, dramatic increases in household mortgage debt, and exponential growth in financial firms’ trading activities, unregulated derivatives, in short term ‘repo’ lending markets, among many other red flags. Yet there was pervasive permissiveness: little meaningful action was taken to quelled threats in a timely manner.”

Thus the principal blame is to be laid at the feet of those who permitted fraud not those who committed it. This is somewhat analogous to condemning a parent for letting a child eat an entire bag of Halloween candy rather than directing the principal blame upon the child. The assumption is that children cannot be expected to self-regulate. “The prime example is the Federal Reserve’s pivotal failure to stem the flow of toxic mortgages,” we read,

“which they could have done by setting prudent mortgage lending standards. The Federal Reserve was the one entity empowered to do so and it did not. The record of our examination is replete with evidence of other failures: financial institutions made, bought, and sold mortgage securities they never examined, did not care to examine, knew to be defective; firms depended on tens of billions of dollars of borrowing that had to be renewed each and every night, secured by subprime mortgage securities; and major firms and investors blindly relied on credit rating agencies as their arbiters of risk. What else could one expect on a highway where there were neither speed limits nor neatly painted lines?”

Analogously, if there accidents on the highway, the principal blame lies on the heads of police officers who do not enforce laws, not upon drivers who do not drive sensibly. Government was simply not babysitting when they had a clear responsibility to do so say the Democratic majority members. They were not guarding against the vices of the people. “It was the failure to account for human weakness,” the report argues in one place, “that is relevant to this crisis.”

And the sentries were not at their posts, in no small part due to the widely accepted faith in the self-correcting nature of the markets the ability of financial institutions to effectively police themselves. More than 30 years of deregulation and reliance on self-regulation by financial institutions, championed by former Federal Reserve Chairman Alan Greenspan and others, supported by successive administrations and congresses, and actively pushed by the powerful financial industry at every turn, had stripped away key safeguards, which could have helped avoid catastrophe. This approach had opened up gaps in oversight of critical areas with trillions of dollars at risk, such as the shadow banking system and over-the-counter derivatives markets. In addition, the government permitted financial firms to pick their preferred regulators in what became he race to the weakest supervisor.

Policymakers and regulators could have stopped the runaway mortgage securitization train. They did not. In case after case after case, regulators continue to rate the institutions they oversaw as safe and sound even in the face of mounting troubles, often downgrading them just before their collapse.

What troubled us was the extent to which the nation was deprived of the necessary strength and independence of the oversight necessary to safeguard financial stability.

Fed chairman, Alan Greenspan comes under particularly harsh scrutiny. His views on regulation were controversial at the time and will continue to be so. “It is critically important to recognize that no market is ever truly unregulated,” Greenspan had said in 1997.

“The self-interest of market participants generates private market regulation. Thus, the real question is not whether a market should be regulated. Rather, the real question is whether government intervention strengthens or weakens private regulation.”

Greenspan had argued for a system of decentralized regulation – a system that put regulators in competition with each other and would thus put market pressures on them not to “over-do it.”

“To create checks and balances and keep any agency from becoming arbitrary or inflexible, senior policymakers pushed to keep multiple regulators. In 1994, Greenspan testified against proposals to consolidate bank regulation: ‘the current structure provides banks with a method … of shifting the regulator, an effective test that provides a limit on the arbitrary position or excessively rigid posture of any one regulator. The pressure of the potential loss of institutions has inhibited excessive regulation and acted as a countervailing force to the bias of a regulatory agency to over- regulate.”

What the economic crisis taught us (hopefully) is that this model has some serious drawbacks. By subjecting the regulatory sector to market forces, they set up a situation where banks could force regulators to repress their criticism or risk losing a client. What was true for the Federal regulating agencies was true for the private Crediting agencies as well. “Agencies were compensated only for rated deals,” the report suggests,

“ – in effect, only for the deals for which there ratings were accepted by the issuer. So the pressure came from two directions: in-house insistence on increasing market share and direct demands from the issuers and investment bankers, who pushed for better ratings with fewer conditions.”

“Because issuers could choose which rating agencies to do business with, and because the agencies depended on the issuers for their revenues, rating agencies felt pressured to give favorable ratings so that they might remain competitive.

“[A] Former Moody's vice president and senior credit officer, testified to the FCIC, the threat of losing business to a competitor, even if not realized, absolutely it tilted the balance away from an independent arbiter of risk toward a captive facilitator of brisk transfer.”

In short, “Moody allowed itself to be bullied.” And in a similar way, the real estate appraisers were as well. “One 2003 survey found that 55% of the appraisers had felt pressured to inflate the value of homes,” the report indicates,

“By 2006, this had climbed to 90%. The pressure came most frequently from the mortgage brokers, but appraisers reported pressure from real estate agents, lenders, and in many cases borrowers themselves. Most often, refusal to raise the appraisal meant losing the client.”

Interestingly, the Federal regulatory powers, it appears, had other priorities anyway. In one interview recorded in commission hearings, Federal regulators suggested that the primary duty of law enforcement personnel after 9/11 was focused upon antiterrorism not mortgage fraud. It was insinuated that focusing on financial malfeasance in an era of war against Al Qaeda would have been negligent. Surely, the American people could be trusted to regulate themselves economically while their law enforcement system concentrated on protecting them militarily . . . or so they thought.

The report makes clear the fact that at every level in the financial workings of the United States a spirit of “what-can-I-get-away-with-ism” prevailed in the early part of the first decade of the 21rst century.

And yet, it would be a mistake to infer that simply because the majority of the committee members focused on the dereliction of duty on the part of government regulators, that they have no sympathy for the argument that the American people share some of the blame. “Financial firms were not alone in the borrowing spree,” they write,

“From 2001 to 2007, national mortgage debt almost doubled, and the amount of mortgage debt per household rose more than 63% from $91,500 to $149,500 even while wages were essentially stagnant. When the housing downturn hit, heavily indebted financial firms and families alike were walloped.”

“As a nation, we must also accept responsibility for what we permitted to occur. Collectively, but certainly not unanimously, we acquiesce to and embraced a system, a set of policies and actions, that gave rise to our present predicament.”

“We conclude there was a systemic breakdown in accountability and ethics. The integrity of our financial markets and the public's trust in those markets are essential to the economic well-being of our nation. The soundness and the sustained prosperity of the financial system and our economy rely on the notions of fair dealing, responsibility, and transparency. In our economy, we expect businesses and individuals to pursue profits, at the same time that they produce products and services of quality and conduct themselves well. Unfortunately – as has been the case in past speculative booms and busts – we witnessed an erosion of standards of responsibility and ethics that exacerbated the financial crisis. This was not universal, but these breaches stretched from the ground level to the corporate suites. For example, our examination found, according to one measure, that the percentage of borrowers who defaulted on their mortgages within just a matter of months after taking a loan nearly doubled from the summer of 2000 628-2000 seven. This data indicates that they likely took out mortgages that they never had the capacity or intention to pay.”

This is the very point that the Republican minority will want to stress. Had people not taken out loans that they knew they could not pay - that they knew they did not have the income to cover - there would have been no toxic assets to sell to investors at the top.

Nevertheless, there is ample evidence in the record collected by this committee that ethical behavior and rational responsibility played second fiddle to the love of money. People claimed income that they could not demonstrate. Mortgage workers accepted those perjuries knowing they could pass them on. IBGWBG (“I’ll be gone. You’ll be gone”) was the mantra of the times.

Real estate appraisers judged their estimates up to keep their clients.

And all the while, investors insisted that the CEOs of the companies who provided this cornucopia of dog-meat supply them with caviar for the price of baked beans. “Compensation systems, designed in an environment of cheap money, intense competition, and light regulation,” the report asserts,

“ – too often rewarded the quick deal, the short-term gain – without proper consideration of long-term consequences. Often, those systems encouraged the big bet – where the payoff on the upside could be huge and the downside limited. This was the case up and down the line – from the corporate boardroom to the mortgage broker on the street.”

Many mortgage lenders set the bar so low that lenders simply took eager borrowers qualifications on faith, often with a willful disregard for a borrower's ability to pay. Nearly one quarter of all mortgages made in the first half of 2005 were interest-only loans. During the same year, 60% of “option ARM” loans originated by Countrywide and Washington Mutual had low or no-documentation requirements.”

In other words, mortgage brokers expressed little care for the banks they sold mortgages to or the investors who they knew would eventually buy them, cheered on by crediting agencies who did not seem to be able to put public interest above short term profit. Condemnation of these crediting firms is particularly harsh in this report.

“We conclude that the failures of credit rating agencies were essential cogs in the wheel of financial destruction. The three credit rating agencies were key enablers of the financial meltdown. The mortgage related securities at the heart of the crisis could not have been marketed and sold without their seal of approval. Investors relied on them, often blindly. In some cases, they were obligated to use them, or regulatory capital standards were hinged on them. This crisis could not have happened without the rating agencies. Their ratings helped the markets soar and their downgrades through 2007 and 2008 wrecked havoc across markets and firms.

83% of the mortgage securities rated AAA in 2007 ultimately were downgraded.

Trillions of dollars had been wagered on the belief that housing prices would always rise and that borrowers would seldom default on mortgages, even as their debt grew. Shaky loans had been bundled into investment products in ways that seem to give investors the best of both worlds – high-yield, risk - free – but instead, in many cases, would prove to be high risk and yield free.

Later the same accrediting agencies would simply argue that they were understaffed and under paid for the task they were asked to do. They would later argue that thousands of their most qualified people were being hired out from under them by the very institutions that later demanded accurate, reliable, estimations which in effect, would have made their products unsellable. In other words, they argued that they were asked to do more than was humanly possible - essentially to supervise thousands and tens of thousands of liars lying. Without the ability to investigate individual loans, corporations, investors, and accrediting agencies came to rely on mathematicians, people who could look into the rear view mirror of data and tell the decision makers how to drive the road ahead.

“We had allowed the system to race ahead of our ability to protect it, the report concludes. IBGYBG. “I’ll be gone. You’ll be gone.” “These conditions created an environment ripe for fraud.”

“No one in this pipeline of toxic mortgages have enough skin in the game. They all believed they could offload their risks on a moment’s notice to the next person in line. They were wrong.”

“These trends were not secret. As irresponsible lending, including predatory and fraudulent practices, became more prevalent, the Federal Reserve and other regulators and authorities heard re warnings from many quarters.”

“Many people chose poorly. Some people wanted to live beyond their means, and by mid-2005 – nearly one quarter of all borrowers nationwide were taking interest only loans that allowed them to defer the payment of principal.”

What was happening seems clear in hindsight. “It didn't take Sherlock Holmes to figure out this was bogus,” one regulator told the commission.

“As he tried to figure out why America West would make such obviously fraudulent loans, a friend suggested that he “look upstream.” Cox suddenly realized that the lenders were simply generating product to ship to Wall Street to sell to investors."

“You had no incentive whatsoever to be concerned about quality of the loan, whether it was suitable for the borrower or whether the loan performed. In fact, you are in a way encouraged not to worry about those macro issues.’ He added, ‘I knew that the risk was being shunted off. I knew that we could be writing crap. In the end it was like a game of musical chairs. Volume might go down but we were not going to be hurt.’

On Wall Street, where many of these loans were packaged into securities and sold to investors around the globe, the new term was coined: IBGYBG, “I'll be gone, you'll be gone.” He referred to deals that brought in big fees up front while risking much larger losses in the future. And, for a long time IBGYBG worked at every level.”

Remove the fear of consequences and what happens to people's ethics? What seems clear from this report is that most people would like to think as Alan Greenspan did; that people will police themselves. What they actually do however is somewhat less angelic. What you get is appraisers not telling the truth to borrowers; Borrowers not telling the truth to lenders; Lenders not bothering to tell the truth to bankers; Bankers not telling the truth to crediting agencies; Crediting agencies not telling the truth to investors. And overseeing it all, mathematicians trained to think that human beings will function like laws of physics. “This entire market depended on finely honed computer models,” the report says, “ – which turned out to be divorced from reality – and on ever rising housing prices.”

In physics, quarks always act as they ought. In human economic systems, the subjects don’t; Perhaps, a poignant argument for the importance of history classes and philosophy classes in the business majors.

The financial crisis inquiry report sums it up in these words:

“The models relied on assumptions based on limited historical data; for mortgage-backed securities, the models would turn out to be woefully inadequate. And modeling human behavior was different from the problems the quants [math whizzes] had addressed in graduate school. ‘It is not like trying to shoot a rocket to the moon where you know the law of gravity,’ Emanuel Derman, a Columbia University finance professor who worked at Goldman Sachs for 17 years, told the commission. ‘The way people feel about gravity on a given day isn't going to affect the way the rocket behaves.’”

I am convinced that people began to behave differently when the borrowers and the lenders were no longer members of single communities. In a matter of a few short years, everyone in the system began to care more about quantity than quality. “New mortgages proliferated, and so did new borrowers, we read,

“Inevitably, this became a market in which the participants – mortgage brokers, lenders, and Wall Street firms placed a greater stake in the quantity of mortgages signed up and sold than in their quality.”

“There is a high potential for gaming when virtually any asset can be churned through securitization and transformed into a AAA rated asset,” Herb Sandler testified to the committee, “and when the multi-billion-dollar industry is all too eager to facilitate this alchemy.” This process was a consequence of growing alienation of credit users and credit providers. The report speaks eloquently on this precise observation.

“When originators made loans to hold to maturity – an approach known as ‘originate-to-hold’ – they have a clear incentive to underwrite carefully and consider the risk. However, when they originated mortgages to sell, securitize or otherwise – known as ‘originate-to-distribute’ – they no longer risked losses if the loan defaulted. As long as they made accurate representations and warranties, the only risk was to their reputations if a lot of their loans went bad – but during the boom – loans were not going bad. In total, this ‘originate-to-distribute’ pipeline carried more than half of all mortgages before the crisis, and a much larger piece of subprime mortgages.”

“For decades, a version of the ‘originate to distribute’ model produced safe mortgages. Fannie and Freddie had been buying prime, conforming mortgages since the 1970s, protected by strict underwriting standards. But some saw that the model now had problems. ‘If you look at how many people are playing, from the real estate agent all the way through to the guy was issuing the security and the underwriter and the underwriting group and blah, blah, blah, then nobody in this entire chain is responsible to anybody,’ Louis Ranieri an early leader in securitization, told the FCIC.”

“For brokers, compensation generally came as upfront fees – from the borrower, and the lender, or both – so the loans performance mattered little.”

“The definition of a good loan changed from one that pays to one that could be sold,” Patricia Lindsay formerly a fraud specialist at New Century, told the FCIC. And the Commission insists that this is why more oversight was needed. “Lax or practically nonexistent government oversight created what criminologists have labeled ‘crime facilitative environments’, where crime could thrive,’ said Henry N Pontell, a professor of criminology at the University of California Irvine during the commission hearings.

Democratic Committee member conclusion? We need more regulators, more regulations, and more bureaucratic oversight.

This brings us to the Republican position. They argue that the American people were “baited” into borrowing more than they should by government policies that encouraged mortgage brokers and banks to close their eyes when loaning to higher risk populations. They argue that the government was putting pressure on them to get more people into homes. “Two thirds of the non-traditional loans made by the banks in 2003, says the report, “had been of the stated-income, minimal documentation variety known as “liar loans”, which has a particularly great likelihood of going sour.”

They target the Community Investment Act as the primary cause of the debacle.

“The CRA [Community Reinvestment Act] called on banks and thrift to invest, lend, and service areas where they took in deposits, so long as these activities didn't impair their own financial safety and soundness. It directed regulators to consider CRA performance whenever a bank or thrift applied for regulatory approval for mergers, to open new branches, or to engage in new businesses.”

“Initiated by Congress in June 1992 and pressed by HUD in both the Clinton and George W. Bush’s administrations, the US government’s housing policy sought to increase homeownership in the United States through an intensive effort to reduce mortgage underwriting standards.”

In other words, the CRA made it clear that banks that did not loan money to the people in the communities where they took in deposits might have their freedom to operate infringed with and thus, they succumbed to the pressure and simply made loans that they formerly would not have.

Here are the Republican arguments.

“The majority's approach to explaining the crisis suffers from the opposite problem – it is too broad. Not everything that went wrong during the financial crisis caused cracks, and while some causes were essential, others had only a minor impact. Not every regulatory change related to housing and financial system prior to the crisis was a cause.”

“Using this standard, I believe that the sina qua non of the financial crisis was US government housing policy, which led to the creation of 27 million subprime and other risky loans – half of all mortgages in the United States – which were ready to default as soon as the massive 1997 to 2007 housing bubble began to deflate. If the U.S. Government had not chosen this policy path – fostering the growth of a bubble of unprecedented size and an equally unprecedented number of weak and high-risk residential mortgages – the great financial crisis of 2008 would never have occurred.

In the end, questions of who knew what when need to be addressed before blame can be assigned if it needs to be. But the following observation by the committee leaves one with the feeling that there were insiders that knew what was going on. “In 2000 and 2006, CDO managers were less likely to put their own money into their deals,” the commission concluded,

“Early in the decade, investors had taken the managers’ investment in the equity tranche of their own CDO’s to be in assurance of quality, believing that if the managers were sharing the risk of loss, they would have an incentive to pick collateral wisely. But this failsafe lost force as the amount of managers investment per transaction declined over time. ACA management, a unit of the financial guarantor ACA Capital, provides a good illustration of this trend. ACA held 100% of the equity in the CDOs it originated in 2002 and 2003, 52% and 61% of two deals originated in 2004, between 10% and 25% of deals in 2005, and between 0% and and 11% of deals in 2006.”

It seems that the fist question an investor should be asking from now on is not, “What do the rating agencies say?” but “How many shares have you bought?”